Multiple Listing Services (MLSs) have long operated under a standard subscription model in which subscribers pay a flat rate per agent, regardless of the size of the brokerage they belong to or the revenue the brokerage contributes to the MLS. This pricing structure is designed to ensure equal access to the database for all real estate professionals but does not recognize or reward the revenues delivered to MLSs from larger brokerage firms. 

The Problem with Flat-Rate Pricing

In most industries, businesses enjoy economies of scale—larger entities that bring in more customers or contribute more revenue typically receive volume discounts. However, MLSs do not currently operate this way. Whether a brokerage has five agents or five thousand, each agent pays the same subscription fee. This model does not recognize the value that larger brokerages contribute to the revenues of the MLS organization. While MLSs receive volume discounts on their software, the larger they become, these economies of scale are not passed on to the brokerages that enable MLS organizations to become larger. 

Why Not Enterprise-level pricing?

Nearly every software company today provides individual, small group, and enterprise level pricing for its solutions. Many of the technologies available today through MLSs can be purchased by individuals for a much higher price than the enterprise-level MLS organization pays. 

Maybe it’s time to think about rewarding brokerages for the number of customers they bring to the MLS or maybe the number of listings or transaction volume they deliver to the real estate marketplace. Some privately funded MLSs incentivize their broker shareholders with end of year payments based on the number of listings or transaction volume they delivered. 

Why couldn’t an MLS have tiered pricing based on the number of agents you encourage or even require joining the MLS? Brokers could use these discounts as revenue generation to help improve their ever-declining profit margins. This approach could encourage brokerages to choose their MLS of choice in a state and stick with them. 

The Brokerage-Controlled Subscription Model

In this enterprise pricing model, the MLS may bill the brokerage for all its agents to allow each brokerage to determine the price they would like to charge for MLS fees. Today, many regional MLSs offer wholesale pricing to associations who then mark it up and sell it at the retail price they believe is appropriate. Why couldn’t brokers also become MLS retailers?  This could allow brokerages to bundle MLS access with their existing technology fees, eliminating the need for brokers and MLSs to chase individual agents who can often pay their MLS dues late. This would also eliminate the chances that MLS access to the delinquent agent, or worse yet, the entire office would be turned off. 

Encouraging Growth in MLS Subscriptions

If the industry wants to see broader participation in MLSs, it’s time to rethink the pricing structure. Volume discounts and brokerage-controlled subscriptions could provide a more sustainable, growth-friendly model. By allowing brokerages to take on more control of subscription distribution, brokers gain more control of how they would like to pay for MLSs services and how much they would like to charge their agents for access. 

In an era where technology and business models are evolving rapidly, MLSs must embrace innovative pricing strategies to keep pace with the changing real estate landscape. It’s time to get creative and find new ways to encourage customer growth while ensuring that MLSs remain financially strong and accessible to all.

What do you think?